EHedger Closing Grain Commentary 1.19.10

Published on: 17:32PM Jan 19, 2010
Market Settlement Change Low High 
March corn 369 1/4 -2 1/4 367.75 375.25
March wheat 500 1/2 -9 1/2 496.5 515.25
March soybeans 963 1/2 -10 1/2 962.75 984
March soymeal 290.90 -0.80 289.6 294.2
March soyoil 37.15 -0.38 37.11 37.98
Feb live cattle 87.9 0.55 87.40 87.95
Feb lean hogs 70.750 0.78 70.05 70.95
Corn, soybeans and wheat all closed lower on the day. All three markets traded higher overnight, but were unable to stay higher on the day for too long. Weekend rains were better than anticipated for Argentina and the outlook looks drier for Brazil. This should help many of the drier areas of Argentina for now and help harvest progress in some of the wetter areas of Brazil. This weighed on soybean prices for the majority of the day. We will still have to get cooperation from Mother Nature to finish up the growing season in South America. However, after the bearish USDA report last week, it will take a weather scare to move the markets higher from here. Stocks look to build for corn, soybeans and wheat through 2010 (at this time!) both in the U.S. and globally. Without a weather problem in South America, prices will remain under pressure. The sharp reduction in wheat acres will make the wheat balance sheet “less bearish” and will make the 2010 corn and soybean balance sheets look very bearish at these levels. With the report now out of the way, we will look for rallies in corn and soybeans to make additional sales. Any rally towards $4.25 in corn and $9.75 in soybeans should be used as a selling opportunity as we head into the spring. There are a lot of “new longs” in our markets and without a weather problem we should see a lot of selling pressure on the markets. We will also see a lot of corn for sale on the farm for the remainder of the month as producers free up some money and move some lower quality grain. We are on a very large break, so we could easily see a large rally at any time. Make sure you have your orders placed, as I do not expect these rallies to last for long. Good luck and as always give us a call if you have any questions.
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